Troubled coal miner, Hwange Colliery Company Limited (HCCL), is set to retrench over 1 000 employees and dispose of its non-core assets in an effort to streamline operations, a Cabinet minister said.
Finance minister Patrick Chinamasa last week announced that government — with a 37 percent shareholding in HCCL — was implementing various measures to revive the country’s largest coal producer.
He said the measures ranged from the disposal of non-core assets — which include provision of housing and other related amenities, schools, and health facilities — to job cuts, saying the group’s 3 200 workforce was bleeding the company, stating HCCL could only support 800 workers.
“Government is exploring the scope for shedding off some of Hwange Colliery’s non-core operations, including rationalisation of its workforce from the current 3 200 to levels that are commensurate with production,” the minister said in his Mid-term Fiscal Policy Review.
This comes as Mines deputy minister Fred Moyo recently told Parliament that HCCL intended to retrench over 1 000 employees as part of efforts to remain viable.
Other shareholders in the Zimbabwe and Johannesburg-listed coal miner are British business mogul, Nick van Hoogstraten, who holds a 15 percent stake along with Mittal Steel African Investment which holds 10 percent.
Chinamasa said the coal mining concern — which reported a $115 million loss in 2015 alone — was being weighed down by socioeconomic burdens, a situation compromising its core business of coal mining, resulting in perennial losses.
“During its heyday, HCCL developed itself into an entity supporting all facets of Hwange town’s life, including provision of various services to a population of about 55 000.
“The services delivered included those normally associated with local and central government, such as road maintenance, refuse collection, water and sewer reticulation, power generation, schools, health, housing, as well as recreational facilities which are not core to coal mining,” he said, adding the company also operated its own railway and road transport system, internal security and telephone system.
The Treasury chief said government was also mulling the disposal of HCCL’s housing facilities to the Local Governance ministry and having the Health Ministry take charge of the group’s hospital facilities.
HCCL is also facing litigation threats from creditors after it failed to service its $310 million debt.
The ailing company recently engaged financial services advisory firm, Brainworks Capital (Brainworks), to assist in debt restructuring and capital raising initiatives. Daily News